How to Sink a Submarine, Apple, or the Tech Giant of Your Choice

Over the holiday weekend, I was in the Tattered Cover bookstore in Denver, and I ran across a fabulous book called, "Blackett's War." Here's the Amazon description: "The exciting history of a small group of British and American scientists who, during World War II, developed the new field of Operations Research (OR) to turn back the tide of German submarines -- revolutionizing the way wars are waged and won." Some went on to win Nobel prizes.

It got me thinking. Is there a modern field of endeavor, operations research & analysis combined with historical business analysis, that can create a body of knowledge that describes, in an operations research sense, how to compete against a giant like Amazon, Apple, Google or Microsoft?

That is, we all know that great products and great focus on the customer create a winning combination, but in addition to all that, are there OR-based strategies that can be developed? Here's just a glimmer of what I mean. "Apple, Samsung and the 'profit share trap'.

There are mathematical and market forces that lead to this: "The Smartphone Wars Are Over, Everyone Wins." The obvious thing to do is move on to the next Big Thing. Perhaps the non-obvious thing to do render the competition less effective by analyzing those forces.

In fact, I wonder if these big tech companies, like Wall Street firms, hire operations research analysts, statisticians, physicists, and business analysis experts to, for example, build simulations and advise the CEO on how to best exploit the opponent's weaknesses, just as the allies used science and math to defeat the Germans in WWII. Maybe it would also help avoid the major error that Intel's Paul Otellini made, described below.

It might also help avoid strategies that appear to make life difficult for the competition but end up just alienating customers. Here are two examples of defective strategies that probably looked like a good idea to some executive, but didn't have a thorough analysis behind them. These two examples show (business) Admirals fighting in the blind with no OR analysis of the consequences.

Creating TV ads that attack the competition, crippling your technologies in key ways to blunt the interoperability of the competition, hiding your unsavory practices from customers with complex software and using the fine print of EULAs to protect you are all 20th century strategies used by CEOs who aren't technically trained. Perhaps the next generation of CEOs will use the sophisticated OR strategies developed 70 years ago that are still being used today to tackle our nation's Biggest Problems (when politics don't undemine them). A lot of this work, for example, airline security and nuclear weapon reliability, is done at our U.S. National Laboratories, like Los Alamos, Oak Ridge, Lawrence-Livemore, etc.

After all, business is war.

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Tech News Debris for the week of May 20

Once upon a time, Steve Jobs asked Intel CEO Paul Otellini to make the CPU for the planned Apple smartphone, to be called the iPhone. Mr. Otellini declined the offer, sizing up Intel's corporate focus and not quite appreciating the potential of the smartphone revolution. Later, Mr. Otellini would regret the decision, saying that he should have followed his gut. Here's the story by Jean-Louis Gassée: "Otellini’s Striking Confession."

Once you make the conscious decision to invest in supercomputer technologies, there are huge payoffs down the road. Previously, I have mentioned how IBM's investments in supercomputers led to Watson, and then I opined that Watson would lead to new, unanticipated technologies. I'll have to say that I was right on all that. "IBM Watson on smartphones to make customer service bots less annoying." By the way, Jon Brodkin is a terrific technical writer and you should read anything he publishes.

Supercomputer technologies can lead to advanced analysis that can go a long way towards helping a seat-of-the-pants CEO. For example, along the lines of the preamble above, our WWII scientists told the Admirals to increase the size of the convoys in the North Atlantic. The number of escort vessels didn't have to increase -- or increase only modestly. It was a shocker, and flew in the face of common sense. But it worked.

When you have an autocratic CEO, and the operations research advice is to do something that seems crazy, he must have a special kind of technical training and personality to adopt the idea, trusting in the deep analysis. Like a chess grandmaster. Lesser CEOs throw you out of the office. Does Tim Cook have a team doing that? Would he take their advice if he did?

Speaking of Mr. Cook, some of TMO's readers complain that Apple's CEO doesn't have the charisma to be persuasive and command our attention and loyalty. It's almost as if, unless a charismatic leader tells us to do something, we don't have the internal, executive function to make a decision on our own. Of course, carried to extremes, we get a situation where a Steve Jobs protégé like Larry Page goes overboard. That's not so great either: "Larry Page wants you to stop worrying and let him fix the world."

Particle Debris is a generally a mix of John Martellaro's observations and opinions about a standout event of the week combined with a summary of articles that didn't make the TMO headlines, the technical news debris. The column is published most every Friday except for holidays.

John, concerning your last note about wish lists, I disagree with the article’s comment that Apple should dump the standard MacBook Pro for 2 reasons.
1. the retina displays use up computing power I need for other reasons. Some video professionals have had problems with display tearing on the Retina models. Available battery life diminishes as well.
2. Apple seems to be going in the direction of “let’s seal this computer, so the user cannot add RAM or change the drive without a lot of additional expense.” This only serves to shorten the useful life of any Mac model, and is a not a very smart move by Apple.

Your piece came out in the midst of a busy work/travel time on my end, but just wanted to say that I think this is an excellent essay operations research and its potential impact on Apple’s product line.

Some very nice reading in your lineup, although time hasn’t permitted me to peruse all. I particularly enjoyed the piece on Otellini (which I did know about but found insightful all the same) and Larry Page (which I did not know about, but find confirmation of a deepening impression).

I’m not sure I concur with the conclusion that the smart phone wars are over, but there is merit in much of what the author argues.